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SYDNEY - The BNZ's parent bank, National Australia Bank, yesterday posted a record annual profit of almost A$4.4 billion ($5.05 billion) as the group showed signs that its robust recovery was continuing to forge ahead.
Australia's largest bank reported a 10 per cent rise in net profit to a record A$4.392 billion in the 2005/06 year, beating consensus market forecasts.
The bank also flagged a A$500 million on-market share buyback to be completed in the first half of 2007.
NAB shares shot up A61c to A$38.81 shortly after the profit announcement.
NAB chief executive John Stewart said the result was further evidence the bank had turned a corner almost three years after its rogue trading scandal triggered a round of boardroom chaos and disappointing results.
"From where we were, this is a great result," Stewart said.
"What we've done is taken different companies that were in various states of disarray and all of the companies have contributed.
"What we do have is a great set of foundations on which we can build shareholder value."
NAB's underlying result was a 21.9 per cent increase in cash earnings to A$3.967 billion for the year, while cash earnings from ongoing operations rose 20.2 per cent to A$3.798 billion.
The result beat market forecasts, which had been for a record headline net profit of A$4.2 billion and cash earnings, the industry's preferred measure of profitability, of around A$3.8 billion.
"We have faced the issues that confronted the National Australia Bank in 2004 and are fundamentally changing our culture and the way we run the business so that we can consistently grow shareholder value," Stewart said.
Gross impaired assets to total lending declined from 0.35 per cent to 0.3 per cent, he said.
"Consistent with industry experience signs are emerging of credit quality weakness in areas such as personal lending in Australia and the United Kingdom. We will work with our customers to manage through any difficulties ahead, particularly the drought in Australia."
In the year to September 30, NAB's total lending rose by 16.8 per cent to A$346.69 billion.
Stewart said the Australian economy remained in good shape despite some issues such as drought and slowing demand.
NAB declared a final dividend of A84c, up A1c, taking the payout for the year to A$1.67, also up a cent.
- AAP
